Experts have suggested that the changes in the Finance Act 2020 would boost economic activities and create relief for Nigerian businesses.
They took this position at the executive roundtable on the Finance Act 2020 and Economic Outlook for 2021 organised by PwC Nigeria.
The virtual event held on Monday was targeted at CEOs, senior executives and medium and small scale enterprises (MSME). It focused on the impact of changes on the Finance Act and other government policies on businesses and taxpayers.
While delivering the keynote address on the economy and government’s policies towards the recovery, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, emphasised the administration’s commitment to economic recovery and inclusive growth through policies and interventions designed to foster economic resilience and business sustainability.
Thus, she said, the Finance Act 2020 was aimed at supporting vulnerable households and businesses while improving fiscal discipline/procurement efficiency, enhancing economic competitiveness, encouraging domestic investors and achieving macroeconomic stability.
Partner and Chief Economist, PwC Nigeria, Dr. Andrew Nevin, highlighted 10 themes that policymakers and businesses should necessarily pay attention to this year.
According to Nevin, Nigeria must, as a priority, find its development path. Achieving this, he said, would include finding innovative ways to act on unlocking Nigeria’s vast dead assets to stimulate growth, harnessing the power of the Diaspora and driving export growth through services.
He added that improving on the country’s low investment and gross capital formation, moving its thriving informal sector to the formal sector while improving on the business environment is necessary.
Nevin said policymakers must address Nigeria’s big three distortions – exchange rate, power and subsidies –while shifting its focus from the Gross Domestic Product (GDP) lens to Sustainable Development Goals and prioritising climate change.
Nigeria’s economy, Nevin noted, is distorted by the exchange rate, fuel subsidy regime and the poor power sector. Addressing these three big distortions will be taking the giant step to restructuring the country’s economy holistically, achieving seven per cent GDP growth and improving the wellbeing of the average Nigerian.
Fiscal Policy Partner and West Africa Tax Lead, PwC Nigeria, Taiwo Oyedele, who shared insights on how the Finance Act 2020 and other significant changes that have been made to existing laws would shape Nigeria’s tax environment, said there were no easy choices or a silver bullet given the limited fiscal space for incentives.
Providing the results of a survey on the Finance Act 2020 conducted by PwC, Oyedele revealed that respondents were asked to indicate which changes in the law they did not agree with. The survey said over half (59.7 per cent) said they did not agree with the idea of transferring unclaimed dividends and dormant account balances to a trust fund while 31.2 per cent did not agree with the plan to introduce excise duty on telecommunications services.
Country Senior Partner, PwC Nigeria, Uyi Akpata, noted that considering the impact the pandemic has had on Nigeria’s economy, it was important businesses understand the forces shaping Nigeria’s economy in 2021. He said the knowledge would help them minimise potential risks and take advantage of the fiscal policies the government had enacted to stimulate the recovery.